A&D Conf Breakout Session #1
- 1. Breakout Session #1 Cases Studies: Commercialization using the SBIR/STTR Program by Sharon C. Ballard, President/CEO EnableVentures, Inc. Phoenix Convention Center January 26, 2012 1 “You envision . . . we enable.”™ © Copyright 2003-2012. EnableVentures, Inc.
- 2. Imagine this start-up scenario: • $Ms in R&D a year over 8 years • Invoices paid in 1-3 days, twice a month • Still own majority of venture • Products with high-profit sales worldwide • Three spin-out ventures sold for $MM • My venture – Reticular Systems, Inc. 2 © Copyright 2003-2012. EnableVentures, Inc. 2
- 3. Venture Funding using SBIR Program • Successful cases: Learn from others • Reduce R&D risks • Generate science, business credibility • Delay dilution of business ownership • Lower Accounts Receivables risk • Do business! • Pop Quiz: contrast Pb of SBIR awards vs. selling equity? © Copyright 2003-2012. EnableVentures, Inc. 3
- 4. Where do entrepreneurs get funding? (Who is the first fool?) Amount of Start-up Cash INC 500 Fastest Growing US companies over $100,000 22% Under $10,000 41% 37% 10,001 to $100,000 http://www.inc.com/magazine/20021015/24778_Printer_Friendly.html © Copyright 2003-2012. EnableVentures, Inc. 4
- 5. Qualcomm Inducted into SBIR Hall of Fame • Founded in 1985, 7 founders • IPO 1991, $100M in gross revenue • $1.5M in SBIR funding • Global workforce = over 17,500 • Market capitalization = over $80 billion • Annual revenues = $11 billion • Over 13,000 patents • 200 manufacturers licenses worldwide • SBIR funded chip development = 2/3 annual revenue © Copyright 2003-2012. EnableVentures, Inc. 5
- 6. ViaSat Trajectory lands it on Hall of Fame Started in their garage! • Founded 1996, $25,000 initial funding • 2100 employees, $688 million sales • Over last 10 years received over $175 million in Phase III (non-SBIR) funding directly from DoD • $10M Phase II with DoD • $100M in Phase III equipment sales • IPO 1996 (NASDAQ: VSAT) © Copyright 2003-2012. EnableVentures, Inc. 6
- 7. “The Big One that got away!” Arizona HNC Software, San Diego • Former Motorola AZ engineer • $230M in SBIR-developed technologies • IPO 1995 • 1270 employees • Acquired by Fair, Isaac for $810M, in 2002 • Founder now university researcher © Copyright 2003-2012. EnableVentures, Inc. 7
- 8. NanoMech, Inc., Fayetteville, AR SBIR Hall of Fame • Technology called “coating’s holy grail”, Cutting Tool Engineering (October 2008). • TuffTek® coatings sales to cutting tool manufacturers and users in automotive and other manufacturing industries; coating technology for manufacturing, biomedical, electronics, and military. • Frost & Sullivan’s 2005 Award for Excellence in Technology in Advanced Coatings, Surface Technologies, and Spray Coatings. • R&D Magazine Micro/Nano 25 Technologies of Tomorrow Award among 25 best micro- and nanotechnologies of 2006. • 2007 Recognition of Excellence in Innovation Award, Under Secretary of Commerce for Technology. • Twenty employees with high wages for Arkansas. © Copyright 2003-2012. EnableVentures, Inc. 8
- 9. HemCon, Inc. • Dressing developed with Oregon Medical Laser Center & US Army - $300K initial Army contract • Received 2nd fastest FDA clearance (48 hours) • 2003 – $8.7M appropriation for manufacturing expansion & procurement • 2004 – $10.5M appropriation for R&D & procurement • 2005 – STTR Grant for $272K • Top 10 Army Inventions Award • 2006 – $5.0M appropriation for procurement • Today – global commercial and retail sales © Copyright 2003-2012. EnableVentures, Inc. 9
- 10. Life Sciences Cases – Hemcon cont’d • Frost and Sullivan’s 2006 Technology Innovation of the Year award • Best of What’s New Award by Popular Science 2003 • 2007 Tibbetts Award from the Small Business Technology Council • 2007 Deloitte Technology Fast 500 • Entrepreneur magazine’s Hot 500 • Inc. magazine: America’s 500 fastest – growing private companies © Copyright 2003-2012. EnableVentures, Inc. 10
- 11. Advanced Ceramic Research, Inc. Tucson, AZ SBIR Hall of Fame • ACR’s first revenues from SBIR and $1,000 in start-up capital. • Since 1989, received nearly $6 million in SBIR/ STTR funding • Over $30 million in follow-on non-SBIR/STTR funding • $35 million in license and technology transfer contracts. • Early follow-on funding from ONR, DARPA, DOE; now most from defense prime contractors, Fortune 500 companies. • From 3 employees in 1990 to 40+ in 1999. • Revenues grew 2,000%, making Inc. magazine’s Fastest 500 (1993 to 1997). • Successful acquisition by BAE Systems © Copyright 2003-2012. EnableVentures, Inc. 11
- 12. What’s in SBIR for large businesses? Phase I Award $ 150,000 Phase II Award $ 1,000,000 Phase III Typical Commitment $ 350,000 Government Phase III Match $ 150,000 Total: $ 1,650,000 What is Pb alone vs. partnering? Primes, where can you get $1M at such Pb? © Copyright 2003-2012. EnableVentures, Inc. 12
- 13. Venture funding with SBIRs? • Long-term strategic decision • Compelling business proposition • Relationships with customers • Good systems engineering • Consistency in sound business practices © Copyright 2003-2012. EnableVentures, Inc. 13
- 14. Sharon’s lessons • Have a strategic plan and stay focused – Technology maturity > market pace • Offer a specific solution • Build relationships based on common science/technology interests, if possible • Make customer a hero – Agencies want and need bragging rights – SBIRs often used for training – Keep relationship active if possible – Publish/present papers in great venues • Don't give up on a good idea!!! © Copyright 2003-2012. EnableVentures, Inc. 14
- 15. Common Questions • Company qualifies for program? - Ownership • Principal Investigator (PI) issues - SBIR vs. STTR • Come back for Breakout Session #2 – SBIR Program Overview © Copyright 2003-2012. EnableVentures, Inc. 15
- 16. Break 2:30 – 2:45 pm © Copyright 2003-2012. EnableVentures, Inc. 16